The second session of the Conference of Parties
(COP-2) to the United Nations
Framework Convention on Climate Change (FCCC) convened July 8-19,
1996, in Geneva, Switzerland. On July 18, 1996, the Ministers and
other heads of delegations present at COP-2 crafted and released
a Ministerial Declaration, also called The Geneva Declaration. It
was based on a U.S. policy statement delivered July 17th at COP-2
which: 1) recognized and endorsed the Second Assessment Report
of the Intergovernmental Panel of Climate Change (IPCC) as
currently the most comprehensive and authoritative assessment of
the science of climate change, 2) called for parties to set
"legally binding, medium-term targets" for limitations
and significant overall reductions of their emissions of
greenhouse gases, and 3) rejected commitments for developed
country parties regarding "common or harmonized"
policies and measures in favor of flexibility in applying
policies and measures to achieve emissions limitations and
reductions. The Chairman of COP-2 called for FCCC parties to
"take note" of the Ministerial Declaration, and to
agree as a body to consider a "future decision [containing
these elements] which would be legally binding on all parties
under the FCCC."

Some in the U.S. Congress have voiced concerns
about the principles of common but differentiated commitments and
responsibilities, as well as respective capabilities, under FCCC
for developed versus developing countries. Specifically,
questions have been raised about whether continued adherence to
these principles in any protocol or other legal instrument
negotiated for the post-2000 period could disadvantage the United
States economically and competitively in world markets. Among
some Members and the committees of relevant jurisdiction in the
House and Senate, a need has been expressed to be better informed
about what exactly the United States potentially may be agreeing
to during the current Analysis and Assessment Phase called for in
the Framework Convention's 1995 Berlin Mandate, as well as what
the economic impact would be of future decisions the United
States might make vis a vis other FCCC parties in future
climate protection negotiations.

The Ministerial Declaration of the Second
Conference of Parties (COP-2) to the UN Framework Convention on Climate Change
(FCCC), adopted July 18, 1995,1arose out of consideration of two draft decision options
for future negotiations to protect Earth's climate. One was
presented by the United States2
and the other by the European Union (EU). The
Declaration is predominantly influenced by the U.S. position
which 1) accepts the science of climate change proffered by the Intergovernmental Panel
on Climate Change (IPCC), 2) rejects
uniform "harmonized policies" in favor of flexibility
and, 3) calls for "legally-binding medium-term
targets," which many COP-2 parties claim symbolizes an
earnest commitment to protect "dangerous anthropogenic
interference with Earth's climate system," in the post-year
2000 period.

In essence, the Declaration represents a
request by the Chairman of COP-2, Chen Chimutengwende of
Zimbabwe, for FCCC parties to "take note" of these
proposals and, as such, by agreeing to it expresses the sense of
ministerial participants at COP-2 that, as a body, they do not
object to a "future decision which would be binding on all
parties under the FCCC," even though some parties expressed
their reservations which were included for the record. The
details of that "decision," however, have yet to be
determined, and will be the subject of negotiations over the
coming months to culminate at the Third
Meeting of COP, scheduled for December
1997, in Kyoto, Japan.

Some have described the U.S. position which, in
large part, forms the basis for the Ministerial Declaration, as
being evident of its taking a leadership role in the post-year
2000 period. State Department officials have also commented that
U.S. leadership has encouraged future movement toward a concerted
international policy to protect climate. However Russia, and the
OPEC3 bloc of countries objected to the Declaration outright,
while Australia and New Zealand, noting the Declaration, voiced
concern that the term "legally-binding" in the
Ministerial Declaration is not adequately defined. U.S. State
Department representatives characterized the Declaration's
movement toward medium-term legally binding targets as getting
away from rhetorical, empty pledges which have been the hallmark,
so far, of negotiations toward climate change protection. They
believe that legally binding targets force FCCC parties to gain a
realistic sense of what needs to be done, which in the long run
can help to equalize the differential interest and involvement
among Annex I and other FCCC parties.4 (See Appendix III)

An official U.S. response to the Geneva
Declaration was issued on July 19, 1996, to clarify how a legally
binding medium range target might be achieved. Flexibility in how
one attains emissions-reduction targets, which is a key concept
of the Declaration, assumes a menu of policy options which
U.S. negotiators believe would make potential solutions
affordable. This would be accomplished through implementation of
measures, including global emissions trading schemes, joint
implementation projects (see Joint Implementation below) and U.S.
bilateral efforts, such as the U.S. Country Studies program and
environmental technology trade initiatives sponsored by the
Environmental Protection Agency jointly with the Department of
Energy. In this respect U.S. negotiators believe that such an
approach would not put OECD countries5 at an economic disadvantage, but perhaps allow them to
implement climate protection measures that may eventually pay for
themselves or provide a return on investment. A flexible
approach, they claim, could also allow for either rolling or
cumulative targets based on periodic assessments of progress and
the state of climate science. They emphasized that any medium- or
long-term goals that the U.S. is likely to support would require
the participation of all developed and developing
countries.

State Department officials also described the
adoption of a standardized basis for reporting of international
sources and sinks of greenhouse gas emissions, which was agreed
to by all parties at COP-2, an indication of future progress in
bringing more developing countries into and contributing to the
FCCC process.

U.S. negotiators believe that an analysis and
assessment phase called for in the April 1995 Berlin Mandate, at
the First COP, has not yet yielded
sufficient information whereby they could confidently prescribe
emissions levels or a staged decrease in emissions to reach a
near term emissions reduction target (by 2005). Instead they call
for a focus on medium-term goals, where medium-term is described
as occurring between 2010-2020. The levels of reduction would be
negotiable. Such goals, they believe, would better synchronize
with developed countries' economic and environmental interests,
and are sensitive to the life cycle/turnover rate of existing
capital stock and equipment in developed countries and with
investment cycles that govern replacement of that stock and
equipment.

Undersecretary of State for Global Affairs Tim
Wirth has noted that it is unreasonable, at this time, to
consider long-term goals before COP-3, when taking into account the current partitioning of
global emissions, the largest proportion of which are currently
produced by OECD countries. However, a State Department spokesman
has indicated that U.S. negotiators would probably concede the
necessity of including an acknowledgment of long-term goals and
binding commitments as part of any legally binding text
(instrument) that might be opened for signature at COP-3.
Long-term goals look toward the next 50-100 years and are also
sensitive to corporate time tables for investment. State
Department officials believe this will send a positive signal to
companies to invest in the future. Also, Undersecretary Wirth, in
his statement asserted that the U.S. would reject any rapid
transition strategies suggested in the European Union (EU) and
Association of Small Island States (AOSIS) proposals, 67 which, he affirmed, would interrupt economic growth in
the United States or compromise economic interests of energy
producing industries.

Wirth's statement goes further to reject the
imposition of "harmonized" policies and measures on
developed countries, such as uniform Corporate Average Fuel Efficiency (CAFE) standards and energy taxes, but rather would consider
implementing more flexible, market based approaches, such as an
emissions trading scheme similar to that found in the U.S. Clean
Air Act.

Joint Implementation (JI) is a
keystone of what Undersecretary Wirth has called a flexible
approach to climate protection in the post-year 2000 period. The
United States, and some other nations have advocated an
unrestricted policy of joint implementation (JI), whereby any
country, by merit of their ability to provide resources to any
other country for the purposes of helping them to reduce their
greenhouse gas emissions, could concomitantly earn some credit
toward their own domestic greenhouse gas reduction goals. Joint
Implementation (JI) was a leading topic for debate at COP-1, in
April 1995, and activities which occurred prior to and at COP-1
were described by the U.S. delegation as being very fruitful.
However, the scope and nature of an international joint
implementation initiative (activities implemented jointly) under
FCCC, i.e., has been contentiously debated, especially the issue
of assigning credits for emissions reductions.

The U.S. position on JI has been criticized by
the "Group of 77" (actually about 130 developing
countries) as a tactic by which rich, industrialized countries
could shirk their commitments to reduce emissions at home. Other
FCCC parties, most notably the European Union, claim that such a
use of joint implementation runs contrary to the original spirit
of the terms of the climate convention. Many developing countries
have argued that it is more important for the industrialized
countries to pursue actions that would help to reduce their
currently larger share of global greenhouse gas emissions, at
their source. However, not all developing countries were on
record as being opposed to JI; some anticipated its
implementation as a sole means for them to comply with their
obligations under FCCC, to inventory their sources and sinks of
greenhouse gases and prepare national communications.

The United States is currently engaging both
developing countries and those in economic transition (in Central
Europe) in its US
Initiative on JI (USIJI) pilot
programs. However, at COP-1, a majority of parties agreed that
emissions credits would not be allotted during the international
pilot phase. The German government, however, suggested a possible
ending date of 1999, for all pilot projects, and stated that,
companies investing in successful joint implementation projects
will likely be able to take credit thereafter. In March 1995, in
Santiago Chile, U.S. negotiators, developed new JI agreements
with some Latin American countries. Consequently, they were also
somewhat satisfied that preliminary agreements on international
JI, forged at COP-1, provided for all FCCC parties to
participate. Unlike, the provision of the FCCC, the United States
had considered offering business and industries involved in
activities under the U.S. Climate
Change Action Plan (CCAP) credits which
they would be able to count towards domestic emissions
reductions. The United States has also been holding a series of
outreach programs to involve the business community,
non-governmental organizations, and other private stakeholders
directly in future international climate negotiations to the
extent that they occur. Furthermore, the Clinton Administration
is supporting development of an international "Climate
Technology Initiative," which would help industrialized
countries to facilitate transfer and dissemination of
environmental technologies to the developing world.

Many Members in the U.S. Congress have
expressed concerns about how commitments under FCCC for developed
and developing countries have been and would continue to be
applied differently. They also want to be better informed about
what the United States potentially may be agreeing to during the
current Analysis and Assessment Phase called for in the Berlin
Mandate. Furthermore, many are concerned about what future
direction the United States may take vis a vis other FCCC
parties in future climate protection negotiations, and what the
potential implication for U.S. economy of both possible
medium-term and long-term actions may be.

Many have contended that the Berlin Mandate,
issued in April 1995, at COP-1 8
was flawed because it perpetuated different commitments for
countries which are economically developed, in economic
transition, or developing countries. The Geneva Declaration
reaffirms and extends, after the year 2000, those commitments now
incumbent upon all FCCC parties. State Department officials have
commented that this differential approach has been consistent
from the very beginning, as set forth in Article
4 of the Framework Convention
(Commitments), and has been recognized by FCCC parties as a way
Annex I countries could draw developing countries into the system
for inventory, reporting and complying with their express
commitments under FCCC. Many have pointed out that, to a certain
extent, Annex I countries rely on commitments currently incumbent
upon developing countries, in order that the former may be able
to more realistically assess what their emission reduction goals
might need to be in the near term. This can only be accomplished
with the help of an accurate assessment of global sources
and sinks of greenhouse gases.

However, others have noted that the Declaration
makes no provision for a "transitioning" of developing
countries into Annex I status, which would more realistically
reflect the latters' changing economic developments and their
potential for growth of emissions. Nevertheless, U.S.
representatives at COP-2 were particularly encouraged that plans
to compensate or provide exemptions for certain developing
countries were rejected. Undersecretary Wirth is on record as
supporting what he believes should be a developing nation's
"graduation to compliance," which is made possible
through "implementing polices and measures," such as
those mentioned above which justify developing country
participation in the FCCC process.

Eileen Claussen, Assistant Secretary for Oceans
and International Environmental and Scientific Affairs at the
State Department stressed that any future legally binding
agreement to which the United States would consider becoming a
party would be open to a wide spectrum of national interests for
peer review, and all comments would be taken into consideration.
Toward this end, Undersecretary of Commerce, Everett Ehrlich, is
heading up a U.S. Government team of experts who will attempt to
analyze what constitutes reasonably achievable
emissions-reduction targets and over what time frame. This team
will also assess for the business and industry communities, and
the Nation as a whole, the economic implications for the United
States of an agreement which would include legally binding
emissions reductions targets. A number of possible scenarios were
presented in economic papers prepared for a June 1996, Climate Change Analysis Workshop, hosted by the Departments of Agriculture, Commerce,
Energy, and State, and the Environmental Protection Agency (EPA).
EPA issued a notice of the beginning of a 90-day comment period
on these proceedings, which closed October 28, 1 996 9

Still to be worked out, but not specifically
addressed at COP-2, are possible compliance enforcement measures,
whether they would be "hard or soft," and by whom
compliance would be enforced. Next steps after COP-2 will be
pursued at two upcoming meetings, one December
8-18, 1996, in Geneva, and one February
24-March 7, 1997, in Bonn, Germany.
During these meetings, U.S. representatives will set out to:

The Ministers and other heads of delegations
present at the second session of the Conference of the Parties to
the United Nations Framework Convention on Climate Change,

Noting that this, our meeting at
Ministerial level under the Convention, is a demonstration of our
intention to continue to take an active and constructive role in
addressing the threat of climate change,

Recall Article 2 of the Convention; the
principles of equity and of common but differentiated
responsibilities and respective capabilities in Article
3.1 of the Convention; and the provisions of Article 3.3
concerning precautionary measures; as well as the
specific national and regional development priorities,
objectives and circumstances of the Parties to the
Convention;

Recognize and endorse the Second
Assessment Report of the IPCC as currently the most
comprehensive and authoritative assessment of the science
of climate change, its impacts and response options now
available. Ministers believe that the Second Assessment
Report should provide a scientific basis for urgently
strengthening action at the global, regional and national
levels, particularly action by Annex I Parties to limit
and reduce emissions of greenhouse gases, and for all
Parties to support the development of a Protocol or
another legal instrument; and note the findings of the
IPCC, in particular the following:

The balance of evidence suggests a
discernible human influence on global climate.
Without specific policies to mitigate climate
change, the global average surface temperature
relative to 1990 is projected to increase by
about 2C (between 1 C and 3. SC) by 2100; average
sea level is projected to rise by about 50
centimeters (between 15 and 95 centimeters) above
present levels by 2100. Stabilization of
atmospheric concentrations at twice
pre-industrial levels will eventually require
global emissions to be less than 50 per cent of
current levels;

The projected changes in climate
will result in significant, often adverse,
impacts on many ecological systems and
socio-economic sectors, including food supply and
water resources, and on human health. In some
cases, the impacts are potentially irreversible;
developing countries and small island countries
are typically more vulnerable to climate change;

Significant reductions in net
greenhouse gas emissions are technically possible
and economically feasible by utilizing an array
of technology policy measures that accelerate
technology development, diffusion and transfer;
and significant no regrets opportunities are
available in most countries to reduce net
greenhouse gas emissions;

Believe that the findings of the Second
Assessment Report indicate that the continued rise of
greenhouse gas concentrations in the atmosphere will lead
to dangerous interference with the climate system, given
the serious risk of an increase in temperature and
particularly the very high rate of temperature change;

Recognize also the need for continuing
work by the IPCC to further reduce scientific
uncertainties, in particular regarding socio-economic and
environmental impacts on developing countries, including
those vulnerable to drought, desertification or sea-level
rise;

Reaffirm the existing commitments under
the Convention, including those intended to demonstrate
that Annex I Parties are taking the lead in modifying
longer-term trends in emissions by sources and removals
by sinks of greenhouse gases not controlled by the
Montreal Protocol, and agree to strengthen the process
under the Convention for the regular review of the
implementation of present and future commitments;

Take note that Annex I Parties are
fulfilling their commitments to implement national
policies and measures on the mitigation of climate
change. Also take note that this is not the only
commitment that Annex I Parties have made and that many
of these Parties need to make additional efforts to
overcome difficulties that they face in achieving the aim
of returning their emissions of greenhouse gases to 1990
levels by 2000;

Acknowledge the considerable work done by
the Ad Hoc Group on the Berlin Mandate (AGBM) since the
first session of the Conference of the Parties, including
the substantive proposals presented by a number of
Parties, and call on all Parties to come forward with
proposals to facilitate substantive negotiations
beginning at the fifth session of AGBM in December 1996;

Instruct their representatives to
accelerate negotiations on the text of a legally-binding
protocol or another legal instrument to be completed in
due time for adoption at the third session of the
Conference of the Parties. The outcome should fully
encompass the remit of the Berlin Mandate, in particular:

quantified
legally-binding objectives for
emission limitations and significant
overall reductions within specified
time frames, such as 2005, 2010,
2020, with respect to their
anthropogenic emissions by sources
and removals by sinks of greenhouse
gases not controlled by the Montreal
Protocol;

commitments for all Parties on
continuing to advance the implementation of
existing commitments in Article 4.1;

a mechanism to allow the regular
review and strengthening of the commitments
embodied in a Protocol or other legal instrument;

commitments to a global effort to
speed up the development, application, diffusion
and transfer of climate-friendly technologies,
practices and processes; in this regard, further
concrete action should be taken;

Welcome the efforts of developing
country Parties to implement the Convention and thus to
address climate change and its adverse impacts and, to
this end, to make their initial national communications
in accordance with guidelines adopted by the Conference
of the Parties at its second session; and call on the
GEF to provide expeditious and timely support to these
Parties and initiate work towards a full replenishment in
1997;

Recognize that the continuing
advancement of existing commitments by developing country
Parties, in the context of their national priorities for
sustainable development, requires determined and timely
action, in particular by Annex II Parties. Access to
financial resources and to environmentally-sound
technologies consistent with Articles 4.3, 4.4, 4.5 and
4.7 will be most critical;

Thank the Government of the Swiss
Confederation for its contribution to the work of the
second session of the Conference of the Parties in Geneva
and look forward to meeting again at the third
session in Kyoto, in 1997, thanks to the generous offer
of the Government of Japan.

Appendix
II: the Berlin Mandate: Review
of the Adequacy of Article 4, Paragraph 2 (A) and (B), of the
Convention, Including Proposals Related to a Protocol and
Decisions on Follow-up

1. Decisions Adopted by the Conference of
the Parties

Decision 1/CP. I

The Conference of the Parties, at its
first session, Having reviewed Article 4, paragraph 2(a)
and (b), of the United Nations Framework Convention on Climate
Change, and Having conduced that these subparagraphs are
not adequate, Agrees to begin a process to enable it to
take appropriate action for the period beyond 2000, including the
strengthening of the commitments of the Parties included in Annex
I to the Convention (Annex I Parties) in Article 4, paragraph
2(a) and (b), through the adoption of a protocol or another legal
instrument:

I

The process shall be guided, inter alia, by
the following:

The provisions of the Convention,
including Article 3, in particular the principles in
Article 3.1, which reads as follows: " The Parties
should protect the climate system for the benefit of
present and future generations of humankind, on the basis
of equity and in accordance with their common but
differentiated responsibilities and respective
capabilities. Accordingly, the developed country Parties
should take the lead in combating climate change and the
adverse effects thereof ;"

The specific needs and concerns of
developing country Parties referred to in Article 4.8;
the specific needs and special situations of least
developed countries referred to in Article 4.9; and the
situation of Parties, particularly developing country
Parties, referred to in Article 4.10 of the Convention;

The legitimate needs of the developing
countries for the achievement of sustained economic
growth and the eradication of poverty, recognizing also
that all Parties have a right to, and should, promote
sustainable development;

The fact that the largest share of
historical and current global emissions of greenhouse
gases has originated in developed countries, that the per
capita emissions in developing countries are still
relatively low and that the share of global emissions
originating in developing countries will grow to meet
their social and development needs;

The fact that the global nature of climate
change calls for the widest possible cooperation by all
countries and their participation in an effective and
appropriate international response, in accordance with
their common but differentiated responsibilities and
respective capabilities and their social and economic
conditions;

Coverage of all greenhouse gases, their
emissions by sources and removals by sinks and all
relevant sectors;

The need for all Parties to cooperate in
good faith and to participate in this process.

II

2. The process will, inter
alia:

Aim, as the priority in the process of
strengthening the commitments in Article 4.2(a) and (b)
of the Convention, for developed country/other Parties
included in Annex I, both

to elaborate policies and
measures, as well as

to set quantified limitation
and reduction objectives within specified
time-frames, such as 2005, 2010 and 2020, for
their anthropogenic emissions by sources and
removals by sinks of greenhouse gases not
controlled by the Montreal Protocol, taking
into account the differences in starting
points and approaches, economic structures
and resource bases, the need to maintain
strong and sustainable economic growth,
available technologies and other individual
circumstances, as well as the need for
equitable and appropriate contributions by
each of these Parties to the global effort,
and also the process of analysis and
assessment referred to in section III,
paragraph 4, below;

Not introduce any new commitments for
Parties not included in Annex I, but reaffirm existing
commitments in Article 4.1 and continue to advance the
implementation of these commitments in order to achieve
sustainable development, taking into account Article 4.3,
4.5 and 4.7;

Take into account any result from the
review referred to in Article 4.2(f), if available, and
any notification referred to in Article 4.2(g);

Consider, as provided in Article 4.2(e),
the coordination among Annex I Parties, as appropriate,
of relevant economic and administrative instruments,
taking into account Article 3.5;

Provide for the exchange of experience on
national activities in areas of interest, particularly
those identified in the review and synthesis of available
national communications; and

Provide for a review mechanism

III

3. The process will be carried Out in the light
of the best available scientific information and assessment on
climate change and its impacts, as well as relevant technical,
social and economic information, including, inter alia, reports
of the Intergovernmental Panel on Climate Change. It will also
make use of other available expertise.

4. The process will include in its early stages
an analysis and assessment, to identify possible policies and
measures for Annex I Parties which could contribute to limiting
and reducing emissions by sources and protecting and enhancing
sinks and reservoirs of greenhouse gases. This process could
identify' environmental and economic impacts and the results that
could be achieved with regard to time horizons such as 2005,
2010, and 2020.

5. The protocol proposal of the Alliance of
Small Island States (AOSIS), which contains specific reduction
targets and was formally submitted in accordance with Article 17
of the Convention, along with other proposals and pertinent
documents, should be included for consideration in the process.

6. The process should begin without delay and
be conducted as a matter of urgency, in an open-ended ad hoc
group of Parties hereby established, which will report to the
second session of the Conference of the Parties on the status of
this process. The sessions of this group should be scheduled to
ensure completion of the work as early as possible in 1997, with
a view to adopting the results at the third session of the
Conference of the Parties.

9th plenary meeting April 1995

Appendix
III: Parties to the U.N.Framework Convention on Climate Change

Annex I Countries and
Countries in Economic Transition

Australia
Austria
Belarus aBelgiumBulgaria aCanada
Czechoslovakia a
Denmark
European Economic Community
Estonia a
Finland
France
Germany
Greece
Hungary a
Iceland
Ireland
Italy
Japan
Latvia a
Lithuania a
Luxembourg
Netherlands
New Zealand
Norway
Poland a
Portugal
Romania a
Russian Federation a
Spain
Sweden
Switzerland
Turkey
Ukraine a
United Kingdom of Great Britain and Northern Ireland
United States of America

a Countries that are undergoing the process of transition
to a market economy.

Endnotes

1 UN
Framework Convention on Climate Change. Conference of Parties,
Second session, Geneva, 8-19 July 1996 (agenda item 5) [see
appendix
I]. Review of the
implementation of the convention and of Decisions of the First
session of the Conference of Parties: Ministerial
Declaration (FCCC/CP/1996/L.17, July 19, 1996).

2 The
Honorable Timothy E. Wirth, Undersecretary of State for Global
Affairs on behalf of the United States of America. Presentation
to the Second Conference of Parties, Framework Convention on
Climate Change, Geneva, Switzerland, July 17, 1996.

4 Under the UN Framework
Convention on Climate Change (FCCC), Annex I Countries
include economically developed countries and "other
parties" which are former centrally-planned economies now in
transition to market-based economies. AnnexII Countries
are economically developed countries which have added
responsibilities under FCCC such as fiscal and technological
assistance to economically developing countries which would to
help the latter meet Commitments incumbent upon all FCCC parties.
All Annex II Countries are also Annex I Countries. All remaining
parties under the FCCC, not classified as either Annex I or Annex
II, are considered to be economically Developing Countries.

5 The Organization for
Economic Cooperation and Development (OECD) includes Australia, Austria, Belgium, Canada, Denmark,
Finland, France, Germany. Greece, Iceland, Ireland, Italy, Japan,
Luxembourg, Netherlands, New Zealand, Norway, Portugal, Spain,
Sweden, Switzerland, Turkey, United Kingdom, and United States,
and currently represent about three-fourths of total global
emissions of greenhouse gases.

8UN Framework Convention on Climate Change. Conference of
the Parties, First session, Berlin, 28 March - April 7, 1995
(Agenda item 6 (c)). Conclusion of outstanding issues and
adoption of decisions: Proposal on Agenda item 5 (a) (iii),
submitted by the President of the Conference: Review of the
adequacy of article 4, paragraph 2 (a) and (b) of the Convention,
including proposals related to a protocol and decisions on
follow-up (see Appendix II)